Zář 14

German Gov’t Approves ‘Bundes-Chain’ to Combat Libra Cryptocurrency

The German government will approve its proposed blockchain strategy this September which reportedly blocks projects like Facebook’s Libra cryptocurrency.


Germany Readies Anti-Libra Response

According to Spiegel, Germany’s federal cabinet will approve its blockchain strategy announced back in June 2019.

While the move signals the country’s intent to be a part of the emerging global economy, the government-run ‘Bundes-chain’ might sound the latest death knell for Libra in Europe.

Thomas Heilmann of the center-right Christian Democratic Union (CDU) says Germany’s legislative coalition already has a standing agreement to prevent the operation of any “market-relevant private stablecoin.”

Commenting on the matter, Heilmann declared:

Up to now, the economy has done a great job in countering crises and inflation with measures taken by central banks. Once a digital currency provider dominates the market, it will be quite difficult for competitors.

Rather than Libra capturing the market in Germany, authorities appear to be in favor of creating a state-backed digital currency which will run on the Bundes-chain.

Part of Germany’s proposed blockchain strategy involves creating a framework for crypto startups in the country. As previously reported by Bitcoinist, Bitbond in May 2019, launched the first-ever regulated security token offering (STO) in Germany.

According to Heilmann, authorities in Germany are hoping that the blockchain strategy will help local crypto startups enjoy competitive advantages over their foreign counterparts.

There is, however, little information as to how a government-run Bundes-chain will incentivize private participants.

Europe Wants Nothing to do with Facebook’s Cryptocurrency

For crypto analyst, Alex Krüger, other countries may soon begin to copy Germany’s approach to the emerging cryptocurrency and blockchain technology industry.

Germany is one of a growing list of nations making efforts to block Facebook’s Libra cryptocurrency.

On Friday (September 13, 2019), French Finance Minister Bruno Le Maire declared that the country will work towards blocking Libra in Europe.

Echoing sentiments similar to those espoused by Heilmann, Le Maire surmised that Libra constitutes a threat to the economic sovereignty of Europe.

In China, the central bank is accelerating efforts to launch the country’s digital yuan project. This move is also part of China’s plan to block Libra.

Meanwhile, the Libra Association is moving forward with its plans to launch the crypto project. The Association recently applied for a payment license with Swiss regulators.

How will a government-run Bundes-chain provide economically viable incentives for private participants? Let us know in the comments below.


Images via Shutterstock, Twitter @krugermacro

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Srp 15

Chinese Ponzi Scam Floods Exchanges And Hits Bitcoin Price

According to Primitive founder, Dovey Wan, the latest Bitcoin sell-off is down to a major Chinese ponzi scheme. Little known outside of China, PlusToken scammed over 200k BTC and 800k ETH, which are now hitting exchanges in batches.


Not Another Bitcoin Ponzi Scam

Started mid-2018, PlusToken was a classic Ponzi scheme offering high-yield investment return. There were four layers of membership structure, offering increasing dividends. By early 2019, it had a claimed 10 million members.

The core team were apprehended by police two months ago and will be in jail for decades, according to Wan. However, the reported $3 billion of cryptocurrency they scammed out of members has not been recovered.

Many of the Bitcoin wallet addresses used are believed to be multi-sig, leading to speculation that some key holders remain at large.

The Bitcoin Sell-Off Began In Early July

Security audit firm, Peckshield, has been monitoring money-flow from the PlusToken wallets, and found that since early-july about 1000 BTC has gone into Huobi and Bittrex exchanges. Funds have been moving in small batches of 50-100 bitcoins per batch.

Unconfirmed reports from Chinese traders suggest that someone has also been consistently dumping 100BTC batches onto Binance. This is also believed to be related to PlusToken.

Not News Until Now

One of the big questions around all this is ‘Why are we only hearing about it now?’.

Again, according to Wan, there are three main reasons that exchanges have not paid attention. The main one being that the scam has not been known outside of China, with the possible exception of South Korea.

Added to this, Chinese exchanges didn’t act because the case has officially been ‘closed’ by Chinese police. Finally, police didn’t work with the exchanges, because cryptocurrency exchanges are officially banned in China.

So What Should We Do?

Both Peckshield and Chainalysis are monitoring the coins involved in the scam, but exchanges must also get involved. There is potentially little that can be done about tokens which have already been cashed out. However, exchanges are able to freeze incoming tokens relating to known scams.

The important thing is to ensure that the relevant parties are aware of the situation. Because, 200,000 BTC flooding the market is bad news for everyone. Unless you missed out on buying sub-$10k Bitcoin last time?

Do you think this scam is the cause of the latest crypto market flash crash? Add your thoughts below.


Images via Shutterstock

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Srp 03

Bitmain Loses $625 Million In Two Months, But Pins Hopes On New Tech

Bitcoin mining rig manufacturer, Bitmain, reportedly made losses of $625 million in the first two months of 2019. However, it has high hopes for a turnaround based on demand for new 7nm mining machines.


A Bad Start to the Year

According to a report from a Chinese news outlet, Bitmain’s total operating income for Q1 was $1.082 billion dollars, with revenues split over the three months as $253 million, $253 million, and $579 million (respectively).

January and February saw losses of $345 million and $280 million, although in March the company posted a profit of $315 million. Still, a $310 million loss over Q1 is not a good look.

Reportedly, the loss was down to the offloading of outdated 16nm mining rig inventory at low prices.

New Tech To Change Bitmain Fortunes

Despite Q1 losses, Bitmain expects a strong performance in H2, once its old stock has been cleared and the company starts selling its new 7nm machines. Bitmain has allegedly placed a large order for 7nm chips from Taiwan Semiconductor Manufacturing Company (TSMC), with a lead time of 3 to 4 months.

It expects cash flow to steadily increase in Q3 as advanced orders for the new machines come in, and then see explosive growth in earnings after the first 7nm rigs start to ship.

It also anticipates a growth in profits on its artificial intelligence (AI) line of products.

Better Results To Boost IPO

Bitmain will need to post some better results if it is to attract investors to its beleaguered IPO. The company has allegedly revived its IPO plans in the US, after the original filing in Hong Kong lapsed.

Bitmain had a somewhat disastrous year in 2018 as prices fell across cryptocurrency markets, and it took an ill-advised gamble on Bitcoin Cash. This was considered by many to be good news for Bitcoin as mining became more decentralised and Bitmain’s mining dominance dropped.

The upturn in the fortunes of Bitcoin have also helped Bitmain in its recovery, with some sources claiming that staff options have been already been completed, ahead of the revived IPO, which is now imminent.

Do you think 2019 will be the year for Bitmain? Let us know your thoughts in the comment section below!


Images via Shutterstock.

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Dub 20

Chinese Company Lost $23 Million Allegedly Mining Cryptocurrency in Secret

A subsidiary of Chinese firm Huatie has been sold off at 10 percent of its initial value following losses from suspected secret cryptocurrency mining activities amounting to about $23 million.


90 Percent Value Plunged Probably Due to 2018 Bear Market

According to Chinese crypto media outlet 8BTC, Huatie HengAn, a subsidiary of Huatie has been sold for $2 million. Reports indicate that the company’s value plunged by about 90 percent from an initial valuation of $25 million, all in the space of one year.

Huatie HengAn originally a construction company reportedly purchased 36,500 units of hardware listed as “servers” from Canaan and Ebang in 2018.

Given that both companies don’t sell servers but instead sell crypto mining hardware, the suspicion is that Huatie HengAn pivoted from construction to cryptocurrency mining.

Back in December 2018, Huatie’s end-of-year financial report showed losses of about $14 million for its subsidiary firm. By February 2018, the total net loss had risen to $23 million.

With the total loss just $2 million off from its initial $25 million investment into the business, it appears the parent company decided to count its losses and sell the business.

If Huatie HengAn was indeed engaging in cryptocurrency mining, it would be the latest in a growing list of businesses affected by the 2018 bear market.

During the year-long bear period, the entire cryptocurrency market fell by an average of more than 80 percent across the board.

2018 – A Dreadful Year for Mining Companies

For the first half of 2018, it appeared as though mining companies were immune to the hemorrhaging prices in the cryptocurrency market. However, by Q3 2018 reports of difficult financial situations began to emerge.

Cloud mining services like Hashflare were the first to shut down citing lack of profitability. Then reports began to emerge of massive losses for mining giant Bitmain – a situation further worsened by a bet on Bitcoin Cash that ultimately backfired.

The fallout from the suspected losses has seen the company downsize its workforce, firing entire departments. Bitmain has also appointed a new CEO.

Ebang, Bitmain, and Canaan abandoned plans for massive initial public offerings (IPO). GMO also incurred losses of $12 million forcing the company to shut down its mining hardware enterprise.

Even companies like Nvidia that sold hardware for miners weren’t left out as the company is reportedly trying to offload unsold inventory as demand shrunk in 2018.

Do you think Huatie HengAn was secretly mining cryptocurrencies under the guise of could computing? Let us know your thoughts in the comments below.


Images via 8BTC and Twitter (@btcinchina), Shutterstock

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Úno 12

Chinese Billionaire, Zhao Dong, Says Get Bitcoin Now ‘While No One Really Cares’

Zhao Dong, Bitcoin billionaire and one of China’s biggest OTC traders, has taken to WeChat to opine on the industry. He predicts no thaw of crypto-winter this year, but says now is the best time to stock up and hodl.


The Public Chain Alliance Crossing The Bulls And Bears Elite Team

Dong made his comments in the WeChat group for ‘The Public Chain Alliance Crossing The Bulls And Bears Elite Team’. One can only hope that sounds better in Chinese.

He said that obviously fewer people are following bitcoin now than during 2017’s bull run, hence the natural price drop. Furthermore, he suggested that these people would not start paying attention again until the price returns to tens of thousands.

For most people, if they don’t pay attention to Bitcoin now, they won’t pay much attention to most of the time, so for them, only how many tens of thousands of bitcoins will break them will be noticed again. If you and I believe in the future of Bitcoin, so it is best to hold as much as possible when nobody cares.

A Man For All Seasons (Except Autumn)

When asked about industry trends, he said that for 2019, everyone should just try to have a good winter. 2020 would bring the spring, he thought, with summer not expected until 2021. Incidentally, back in November 2018, Dong predicted a bitcoin price of $50,000 by 2021, on microblogging site, Weibo.

He explained his rationale for investing, and why to buy in a bear market, thus:

In the bull market, I don’t persuade people to buy Bitcoin, because it seems easy to make quick money but in fact it is not. Now [in the bear market], I start to talk people into buying Bitcoin.

It Was The Best Of Times, It Was The Worst Of Times

Back to 2019, Dong cautioned not to be too optimistic or pessimistic, saying that more companies and projects would die. However, he went on to say that some hope will be born of it because the next wave of projects will emerge from this period.

This, he said, would make 2019 both the best time and the worst time for entrepreneurs and investors. Despite the deaths of more companies and projects, good projects are cheaper to invest in. And entrepreneurs can take advantage of competitors at their lowest point.

Dong signed off with a simple piece of advice for investors and entrepreneurs alike:

The only thing you need is patience.

…only in Chinese, obviously.

Do you agree with Dong that patience is key? Share your thoughts below!


Images courtesy of Twitter, Shutterstock

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Pro 30

New Survey Finds 40% of Chinese Want To Invest In Bitcoin

A new survey asked nearly 5000 Chinese people about their familiarity and interest in cryptocurrency. The results of the survey show that two in five or 40 percent wanting to invest in bitcoin, despite the current bear market.


Subject Knowledge

The survey found that 98 percent of the respondents had heard of at least one concept related to cryptocurrency or blockchain.

Although, only 50 percent said they had heard of cryptocurrency, digital currency or bitcoin, and 42% had heard of blockchain. One would imagine a very high level of crossover in these two groups, so it is unclear what the other 48 percent had heard of.

Only 20% of those who have heard of blockchain claim to have an understanding of the technology. Half of these were millennials, suggesting a greater level of crypto-interest amongst this group.

Indeed, the affinity for digital payments among the millennial generation alongside a deep distrust in banks following the ’08 financial crisis may be setting the stage for Bitcoin adoption to happen naturally.

In November, Bitcoinist noted:

[I]n 8 years, there will be no person under 18 years old who have lived in a world without Bitcoin, which has been working flawlessly their whole lives. This will be the reality for everyone born in 2009 and beyond.

Their trust in bitcoin will be as profound as their trust in gravity.

Invested In Crypto

14 percent of survey respondents had invested in cryptocurrency. Of these, one in five have little knowledge and only know about Bitcoin, two in five know about mainstream cryptocurrencies like Ethereum and EOS, and two in five have knowledge of other altcoins.

China’s First Bitcoin Documentary Premiere

Influencers play an important role in the spread of cryptocurrency awareness. Nearly 40% of those polled had discovered crypto through online celebrities. 25 percent learned about crypto through friends and relatives, whilst 20 percent became aware through media coverage.

Age Appropriate

60 percent of those who had invested in cryptocurrency was in the 19-28 age range, with most having invested between 10,000 and 100,000 yuan ($1450 – $14,500). Most of this group invested after the 2017 bull-run, so will likely be nursing some major losses.

Despite this, 40 percent of the survey respondents said that they would invest any spare funds in cryptocurrency in the future.

Barriers To Entry

However, almost 60 percent of respondents said they were scared off by complicated procedures when using wallets or exchanges. A similar number believe that they don’t need crypto as a means of payment, due to existing mobile payment options being pervasive in the country.

Despite these misgivings and the ongoing legality issues, the survey claimed to be the largest of its kind, seems to indicate a bright future for crypto in China.

What do you think of the survey’s findings? Share your thoughts below! 


Images courtesy of Shutterstock

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Lis 21

Bitcoin Hashrate Drop Sparks Rumors of $3.8K Miner ‘Turn-Off Price’

The drop in Bitcoin hashrate has sparked rumors China has turned off huge numbers of mining rigs as the process is no longer profitable.


‘More Economic To Turn Them Off’

Video and photo content which allegedly came from F2Pool owner BitFish hit western social media November 20, being uploaded by local news feed cnLedger and Primitive partner Dovey Wan.

“…Many miners are mining at loss at the current price point, now it’s more economic to turn it off and take it off from the rack to reduce cost on electricity and opex,” Wan explained.

Bitcoin price 00 continues to suffer after a week of price losses which saw its value against the dollar drop around 30 percent. At press time Tuesday, BTC/USD hovered at $4400.

According to Wan, the “turn off price” for mining in China with a Bitmain Antminer S9 rig is approximately $3800, but will adjust down if difficulty and competition also drop.

Factors such as China’s dry season forcing up hydroelectricity costs exacerbated the problem, she said, adding that “some top mining pool owners” had admitted operating at a loss for several months.

F2Pool subsequently released its own list of mining price cut-offs, urging miners to check to ensure they were “running in profit.”

Fake News Allegations Abound

Due to much of the source material originating from Chinese social media, western Twitter commentators were quick to pour scrutiny on the claims, many calling out Wan and cnLedger for allegedly spreading “fake news.”

The material showing miners lying in piles outside was from the Sichuan Province floods, which knocked out many rigs in June, they claimed, nonetheless failing to reproduce the video or photograph from other sources.

Data from Blockchain meanwhile confirms the hashrate drop in Bitcoin, which has reversed to levels last seen in August.

Bitcoin hashrate

The turnaround marks a rare occurrence for the network, which has gotten used to the gradual increase in hashing power, particularly over the past year.

Ongoing attempts to divert miners to Bitcoin Cash in an effort to shore up one of its chains post-hard fork continue.

What do you think about the drop in Bitcoin hashrate? Let us know in the comments below!


Images courtesy of Shutterstock, blockchain.info

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Srp 20

Three Chinese Men In Custody Over $87M Cryptocurrency Theft

Police in China has detained three men suspected of pulling the country’s biggest ever cryptocurrency heist — worth 600 million yuan ($87 million). 


Theft is China’s Biggest: Reports

As multiple outlets report quoting local news publication Huashang News on August 19, authorities concluded an investigation spanning almost six months into three men who allegedly hacked a computer for Bitcoin and Ether.

“Our bureau has not dealt with this kind of case before,” South China Morning Post quotes a police officer as telling Huashang“It’s the first virtual currency-related case in Shaanxi.”

According to Huashang, the investigation behind the arrest of the men — known as Zhang, Cui and Zhou — began in March, when the victim came forward to report a hacking of his computer. At the time, losses were thought to total 100 million yuan.

Having analyzed “30,000 pieces of information” related to the event and the alleged perpetrators, the arrests were made on Wednesday last week. Legal proceedings remain ongoing.

China Leads World in Blockchain Patent Applications

Disrupting The Bitcoin Criminal Narrative

The size of the theft is reminiscent of an increasing cryptocurrency criminal trend largely playing out in nearby Vietnam.

As Bitcoinist previously reported, a giant altcoin scam which afflicted 32,000 investors earlier this year saw organizers make off with funds worth a reported $660 million at the time. More recently in July, the CEO of a local cryptocurrency mining company suddenly disappeared and shuttered operations — leaving $35 million unaccounted for.

While Chinese police added that the use of cryptocurrency made their job more difficult, on a global level, law enforcement agencies are beginning to change the narrative that crypto assets aid and abet the success of criminals.

In an interview with Bloomberg earlier this month, Lilia Infante, an agent with the Cyber Investigative Task Force at the US Drug Enforcement Administration, said she actually hopes malicious actors will “keep using” Bitcoin and even privacy-focused altcoins such as Monero. “The blockchain actually gives us a lot of tools to be able to identify people,” she revealed. 

What do you think about China’s latest cryptocurrency theft? Let us know in the comments below! 


Images courtesy of Shutterstock.

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Srp 12

Man Visits KuCoin’s Hong Kong Office To Find That It Does Not Exist

A Hong Kong man skeptical of the cryptocurrency exchange KuCoin, paid a visit to its registered address in Hong Kong, only to find that it doesn’t actually exist.


Communication Breakdown

In a recent post on Medium, Jackson Wong from Hong Kong wrote about his experience visiting the KuCoin offices in Hong Kong — or rather not visiting, as he found barely a trace of the company in its registered HK location.

The search was prompted by concerns Wong voiced in a previous post in January of this year, in which he warned readers that KuCoin was not actually operating out of Hong Kong like they had claimed. This came after finding out that KuCoin’s registered operating address was in mainland China.

The search was prompted by concerns Wong voiced in a previous post in January of this year, in which he warned readers that KuCoin was not actually operating out of Hong Kong like they had claimed.

This was important at the time because of an announcement by the People’s Bank Of China (PBOC) stating that it would block access to all domestic and foreign cryptocurrency exchanges and ICO websites, which would include affecting the KuCoin exchange.

Wong warned users of the KuCoin exchange to “Get out right now before it is frozen and KuCoinShares (KCS) drops to $0.”

Increasing Suspicions

Fast forward to Wong’s most recent post in which he details his increasing suspicions leading him to go searching for a physical location or individual representing KuCoin in Hong Kong.

Wong explains his long-time suspicions of the KuCoin exchange stemming from never seeing any coverage of the exchange or company in the media, despite claiming a Hong Kong operating address. He also voiced concerns that KuCoin had no registered license to trade cryptocurrency in Hong Kong and that none of the KuCoin team had Hong Kong names or listed a Hong Kong residential address.

Wong’s suspicions finally got the better of him and he decided to go and see if he could find the KuCoin office that was listed in Hong Kong.

Fast forward to Wong's most recent post in which he details his increasing suspicions leading him to go searching for a physical location or individual representing KuCoin in Hong Kong.

Wong documents his journey to the listed building address with photographs. After arriving he takes a photo of a board listing all of the building’s operating businesses. The board had no mention of KuCoin. When Wong went up to the 20th floor he did see a sign reading “Smart Team International Business Ltd.,” which was similar to a secretarial company KuCoin previously registered called “Smart Team Secretarial Ltd.”

Upon further inquiry, Wong was told by a company sharing the 20th floor, that no employees from STIB Ltd. were there because they had moved out years before.

Upon further inquiry, Wong was told by a company sharing the 20th floor, that no employees from STIB Ltd. were there because they had moved out years before.

After arriving he takes a photograph of a board listing all of the building's operating businesses. It had no mention of KuCoin.

Wong ends with a warning to anyone who has funds in KuCoin stating:

Since KuCoin is completely in stealth, and you couldn’t find them in their registered ‘office’, nor is there even a single person in their ‘office’, if KuCoin decides to exit scam on us — either by withholding our withdrawals or simply by shutting down their entire exchange and run with our money —we will have absolutely no recourse.

What do you think about the KuCoin exchange? Are Jackson Wong’s concerns exaggerated? Let us know your thoughts in the comments below!


Images courtesy of Bitcoinist Archives, Medium.

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Kvě 24

From Russia with Love: How Cryptocurrency and Blockchain are Finding Their Feet

· May 23, 2018 · 9:00 pm

In the West, crypto markets continue to battle with the regulatory uncertainty as the SEC and other regulatory bodies take their time to decide which camp they sit on. At the same time, things are not much rosier in the East either where China is yet to warm up to cryptocurrencies.


Blockchain has been around “long” enough to show the proof of concept in that by utilizing blockchain it is possible to streamline a number of processes, both on the governmental and also corporate levels. This then has prompted an exponential rise in fintech start-ups looking to challenge the status quo and disrupt the standard ways of storing, organizing, and extracting data sets. However, the actual implementation of blockchain technologies across much of Western Europe and even the US has been constrained by the regulatory uncertainty.

On the one hand, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are yet to put a fundamental framework forward to appease concerns surrounding utility vs security token model. While in Europe, an introduction of General Data Protection Regulation (GDPR), which is perfectly suitable for blockchain applications, is being rushed through by compliance and HR departments with such haste that blockchain is far away on their radar.

In Blockchain We Trust

In Blockchain We Trust

Russia is an interesting case when it comes to the world of ICOs. On the one hand, it is a great place to source technical experts for your blockchain related ventures. The price tag might be astronomical but at least you know what you are getting for the labor and that is quality, reliability and of course security. So, with one piece of the puzzle sorted comes the tricky bit, finding a suitable business partner and this is where things go wrong… really wrong.

One of the most depressing and worrying statistics that has come out of the Russian Association of Cryptocurrencies and Blockchain (RACIB) is that around half of the ICO funds in the country that were raised in the past year – amounting to $300 million – have gone to pyramid schemes.

Economic and political uncertainty, together with numerous corruption scandals has really dented investor appetite for projects in the country. It is very much high-risk, high-reward based game when it comes to investing in Russia and when combined with the volatile nature of the currency, this perception is unlikely to change anytime soon. The regulation and oversight by the government can help alleviate some of the concerns relating to fraudulent activities but at least for now, the crypto community is yet to “sanction” Russian projects altogether.

In the meantime, the likes of Blackmoon (BMC) will remind budding entrepreneurs and investors of the success stories and there is, of course, hope that the government, which is actively looking at ways to promote and integrate digital economy, will not be overly involved in regulation aspect.

On the subject of regulation, it was reported that the Russian State Duma’s Committee for Legislative Work will support the first reading of an initiative that will add the basic norms of digital economy to the Russian Federation Civil Code. The initiative itself does not mean that digital currencies will now become a legitimate means of payment and instead, a separate law developed by other regulatory bodies, will outline conditions for using digital currencies as a payment method. The initiative will also look to treat a digital confirmation by a user in a smart contract is equal to his written consent.

What Does Russia’s Future Hold?

Over the course of 19-20 May 2018, Moscow hosted one of the largest cryptocurrency summits of 2018, with over 200 speakers and over 3000 participants taking part in the event. While the event may not carry the same weight as Consensus, which took place earlier this month, or d10e, it was an important event for the country that stands at a crossroads with the technology. The decisions that will be made by the government need to be made in the spirit of blockchain and with the aim to further technological, as well as economical, advancement as opposed to being the means to destabilize the Dollar.

The commissioning of the crypto-rouble is not far-reaching enough. Anyone looking for inspiration should turn to Dubai and their smart-city plans. According to Smart Dubai, which is conducting government and private organization workshops to identify areas that will benefit from the overhaul, the strategy could save 25.1million man hours, equivalent to $1.5 billion in savings per year for the emirate. It has been noted that the fast majority of improved efficiency will come from moving to paperless government.

What do you think of the latest developments in Russia and can it reform and lead the way in providing a sound base for crypto projects? 


Images courtesy of Wikimedia Commons, Shutterstock

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